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Insurance could be as good as savings
This week the Association of British Insurers released its latest research into how the economic climate is affecting consumer behaviour.
Interestingly, despite stories in the consumer media that there is light at the end of the financial tunnel, trust in the economy is down.
Nearly a third, 31%, of those asked expect a further deterioration over the next year - compared to 22% three months earlier.
In addition, 31% of people are more worried about losing their jobs than three months ago.
Despite this, four out of 10 people haven’t made financial provisions to cope with large unexpected future expenses, and 42% say the current economic climate means they’re less likely than before to start saving.
However, 42% have begun paying off non-mortgage debt faster, up from 34% a year ago.
And of those who do save, a quarter said that the downturn means they will contribute less, and 9% plan to stop altogether.
Someone diagnosed with a critical illness may find they have other worries on top of their health.
They may well need extra money to cover time off work, childcare, and potentially costs of specialist treatment, drugs, or house adaptations.
It’s sensible for people to reduce unsecured debt, particularly as borrowing often costs more than interest earned on savings.
But if this means they cannot save for a rainy day, critical illness insurance could be a solution.
IAIN MALLON
DIRECTOR OF PROTECTION MARKETING
AXA
